this post was submitted on 26 Sep 2023
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I‘m sure it’s not as simple, but my first take on this was: Europe doesn’t invest in EVs, but China does. They start to loose the Chinese market and are about to loose their own market to China as well. Then politics steps in to "rescue" their own companies but all that does is shelter them from the pressure to adapt and evolve, and in the end they’re beyond hope and left in the dust while the advanced Chinese cars dominate everything.
Countering subsidies with import taxes is a different story ofc. But it certainly feels like the European car industry is in decline and it’s probably their own fault. If not in Europe most certainly in China.
I should add that I have no idea what I’m talking about here, so feel free to tell me where I’m wrong.
China has been doing this for centuries now. You couldnt even break into the chinese consumer space if the CCP decides that you might be a danger to their own industry.
So it's kinda hypocritical to now claim the EU is doing something because its china.
Take a look at what VW did to the British car market with illegal subsidies from the German Government. Then look at VW being caught in the emissions scandle. Long story short, cheating is profitable.
British car manufacturers didn't need Germany to dismantle themselves. The only reason you even have a car industry left is because German companies came in, bought up those husks of mismanagement out of (near) bankruptcy, and turned them around.
Long story short: Don't let nobs run your companies. They were as good at deciding what customers want as Homer Simpson is at designing a car and caused strike after strike by being, well, arrogant nobs telling the peasants to eat cake.
Correct, that was the thinking what had happened at the time but when you realise VWs were being sold about 5k below market cost you realise there was no competing. Look deeper.
If you mean "German cars were cheaper" there's an easy explanation: Unlike the UK ones German manufacturers managed to introduce automation by negotiating its introduction with the workers, who realised that it's necessary to keep the industry but got concessions such as automation first being used for the most back-breaking stuff, not what would save the most money. Meanwhile, in the UK, well, strikes. Strikes, strikes, and strikes.
I'd like to see a source on the below market cost bit, and even if why didn't the UK simply outlaw it. But yes German industry played it fast and loose back then, e.g. it didn't became illegal under German law to bribe foreigners abroad until 2000, on the contrary you would get a tax write-off. Not like the UK operated a different regime, though, you simply weren't as good at it when it came to cars. You're more into the tax haven kind of business, shuffling money discretely to crown dependencies which unlike manufacturing is not dependent on riffraff workers.
No, Germany's government colluded with the manufacturers to charge them less tax to purposefully give them an advantage. By about £5k. You're not providing sources for your claims so I don't feel obliged to.
Well that'd be direct state aid which EU rules forbid on the internal market so... I guess you should've joined earlier. Or had an actual trade policy. Something like that, instead of bemoaning the evil Teutons harassing the poor, poor British Empire with its utter lack of sovereignty. I know it's a popular narrative but it hasn't been true since WWII. Modulo football of course. We'd love to not bully you there, see you take second place instead of the Brazilians, but, alas, you know.
Also, I don't believe that number for a second. Why? Because a VW Golf cost £2099 in 1976, in today's pounds (which I assume that your £5k are) that's as per Bank of England £13,448.89. That's so off scale for a subsidy it's not even funny, and it would also mean that all those other countries there subsidised their cars as VWs aren't cheaper than the Fords and Citroens and whatnot. The Golf is in fact right in between two not entirely incomparable Vauxhalls. Extraordinary claims require extraordinary evidence, yours is one, mine aren't.
I heavily suspect that you read an article wrong somewhere. "(some) UK car manufacturers needed to sell at a loss (and in some cases that might've been £5k) because they didn't manage to introduce automation" sounds more like it.
And it was the Japanese who kicked that off, btw, the German car industry had to react to it to stay competitive just as the rest of the world.
I'm talking after the UK was in the EU but after that first waffley paragraph of bollocks I think I'll stop talking to you now.
What about "The EU forbids direct state aid" was waffley bollocks? Why didn't the UK have Berlaymont nuke Germany's practice from orbit?
Or are we at a cultural impasse, here, I know that at least Americans often don't understand the practice of what we call, over here, when speaking English, taking the piss.
You think a yank would write "waffley bollocks"? You truly are lost.
It is impossible for that to have been sarcasm, of course, as I am German and therefore do not partake in such frivolities. It all makes perfect sense now. Toodeloo.
The Germans and the French wrecked British car manufacturers because they were better, not because of subsidies. British cars at the time sucked.
You do get that those two things are related right?
It is not like European companies are not investing into EVs, but that EVs are different. The big advantage is battery technology, but most batteries are bought from third parties. Only Tesla and BYD have large battery production of their own. So everybody else buys them from other companies. So it is hard to be better on that technological front. The rest is a generally nice interior and software. Interior is something Europeans can do, but it has relativly little value add. What is more important is software and that is difficult for manufacturing based companies like traditional car companies.
This is not to say that European companies can not win this or lack innovation. They make good EVs, but so do the Chinese and that means a war on price. Europe is in a disadvantage on that. However there are solutions being planned like large battery plants by European manufacturers and better software development.
These two statements seem at odds...
Also volkswagen are building factories and bmw are doing partnerships or something. But yeah, they should've been doing that 10 years ago...
EVs are more the just batteries and both Volkswagen and BMW have set up production lines for EVs they developed themself. That is certainly investment. However they are using batteries from other companies. They are catching up with tesla and BYD by also setting up battery factories now. It is a bit late, but maybe not too late.